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Manufacturing: where the parties stand

By Melissa ClarkeUpdated
Mon 5 Aug 2013, 9:32 AM AEST

Photo

The parties have different ideas of how much support the car industry should get and what conditions should be attached to it.

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The future of Australia's struggling automotive industry is the subject of heated public policy debate, mostly centred on whether government subsidies are a waste of taxpayers' money or a vital helping hand for traditional Australian jobs.

What aspects of industry policy do the major parties agree on?

Labor, the Coalition and the Greens all agree Australia's struggling automotive sector needs financial support from the Commonwealth.

There is also bipartisan support for strong anti-dumping measures to protect domestic industries, especially the manufacturing sector, from foreign companies exporting products to Australia at a price below the cost of manufacturing them.

The Coalition supported Labor’s legislation in early 2013 to establish an Anti-Dumping Commissioner within Customs, at a cost of $24 million. That policy focuses on using the extra funding for more investigations and stronger penalties. The Coalition has previously called for the Department of Innovation, Industry, Science & Research to investigate cases, rather than Customs, but supported the bills through parliament.

What are the key differences between the major parties?

While Labor, the Coalition and the Greens all agree the automotive sector needs Government support, each has a different idea of how much support and what conditions should be attached to it.

Under its Automotive Transformation Scheme, Labor would give the automotive industry $1.5 billion in cash payments from 2011 to 2015 and $1 billion from 2016 to 2020. The ALP has also created the position of Automotive Supplier Advocate to promote sales of locally made cars to government and business fleets.

The Coalition policy is to cut the ATS by $500 million, leaving $1 billion for the sector for 2011 to 2015 and the $1 billion in assistance would remain the same from 2016 to 2020.

The Greens back Labor's ATS funding, but believe the grants should be linked to a transition to making electric cars.

What we know

ALP

Projects worth >$500m must show they’re giving Australian companies a chance to win contracts.

Global companies with projects >$2 billion obliged to involve Australian companies in their supply chain/contracting work.

Develop 10 Industry Innovation Precincts

Coalition

Abolish carbon tax to reduce business costs

Enforce Australian standards on imported goods

Reverse cuts to R&D Tax Incentives for business with a turnover >$20 billion/yr

Abolish Industry Innovation Councils

Greens

Want a national target for electric cars, including in government fleets

What don't we know about the major parties' policies?

There is some concern within the industry and innovation sector that research and development (R&D) tax concessions will be targeted for savings by either party looking to return the budget to surplus. The Greens, on the other hand, want to set a national target of public and private R&D spending of 3 per cent of GDP.

The other uncertainty in this policy area is over the Automotive Transformation Scheme. There is division within the Coalition (and to a lesser extent, the ALP) over ongoing subsidies to car manufacturers that continue to shed jobs. The need for budget savings, along with pressure from the public and the backbench, could force party leaders to reconsider.

What we don't know

ALP

Will there be further tightening of tax concessions for R&D by large companies?

Coalition

How will the Coalition's industrial relations policy affect industry and jobs?

Greens

Would the party support further car industry payments for production of petrol and/or diesel fuelled cars?